By Ariba Shahid and Rodrigo Campos
(Reuters) – The International Monetary Fund executive board approved on Friday a fresh $1.4 billion loan to Pakistan under its climate resilience fund and approved the first review of its $7 billion program, freeing about $1 billion in cash.
“Pakistan’s policy efforts under the (program) have already delivered significant progress in stabilizing the economy and rebuilding confidence, amidst a challenging global environment,” the IMF said in a statement.
The review approval brings disbursements to $2 billion within the $7 billion program. No fresh money from the resilience loan was made immediately available.
India has asked the IMF for a broader review of its loans to Pakistan, as tension builds between the nuclear-armed neighbors. An April attack on Hindu tourists in Indian Kashmir killed 26 and triggered the worst fighting between the countries in nearly three decades.
At Friday’s IMF board meeting, India told the IMF that the Pakistan program raised concerns about the “possibility of misuse of debt-financing funds for state-sponsored cross-border terrorism.”
Pakistan’s Prime Minster Muhammad Shehbaz Sharif said in a statement that “India’s attempts to sabotage the IMF program have failed.”
The staff-level agreement on both programs was reached before the current hostilities rose.
(Reporting by Ariba Shahid and Rodrigo Campos; Additional reporting by Urvi Dugar and Sarita Chaganti; Editing by Andrea Ricci and Rosalba O’Brien)
